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Jan 29 - 06:12 AM

GBP/USD - Options Primed For Fed And BoE Policy Meetings

By Richard Pace  —  Jan 29 - 04:10 AM
  • Overnight GBP/USD option expiry gets FOMC and key BoE MPC meeting

  • Implied volatility, which determines it's premium, has gone from 9.5 to 15.0

  • In break-even/premium terms - that's 51 to 81 pips for a straddle

  • The amount of spot pips dealers must capture before generating any profit

  • Bulk of additional premium for BoE, as FED deemed low risk in other pairs

  • See nL1N29Y04TnL1N29Y058

  • However, given BoE importance (market 50/50 on rate cut), price seems tame

  • Existing option positioning may hinder volatility nL1N29X07G

GBP/USD overnight expiry implied volatility: Click here

Refinitiv IFR Research/Market Commentary


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